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Commercial Loan Broker Agreement for India

Commercial Loan Broker Agreement Template for India

A Commercial Loan Broker Agreement is a legally binding document used in India that establishes the terms and conditions between a loan broker and a client seeking commercial financing. The agreement, governed by Indian law including the Indian Contract Act 1872 and relevant banking regulations, outlines the broker's services, responsibilities, compensation structure, and compliance requirements. It includes specific provisions for the Indian market, such as RBI guidelines compliance, and addresses key aspects like confidentiality, indemnification, and dispute resolution within the Indian legal framework.

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What is a Commercial Loan Broker Agreement?

The Commercial Loan Broker Agreement serves as a foundational document for establishing professional relationships between loan brokers and businesses seeking financing in India. This agreement is essential when a company engages a broker to facilitate commercial financing, defining the scope of services, compensation structure, and mutual obligations. The document ensures compliance with Indian banking regulations, including RBI guidelines and the Banking Regulation Act, while protecting both parties' interests. It's particularly relevant in today's complex financing landscape where professional intermediaries play a crucial role in securing optimal funding solutions. The agreement covers critical aspects such as success fees, exclusivity terms, compliance requirements, and service levels, tailored to meet specific client needs while adhering to Indian legal requirements.

What sections should be included in a Commercial Loan Broker Agreement?

1. Parties: Identifies and provides full details of the loan broker and the client, including registration numbers, addresses, and authorized representatives

2. Background: Contextual information explaining the purpose of the agreement and the parties' intentions

3. Definitions: Defines key terms used throughout the agreement including 'Services', 'Success Fee', 'Loan', 'Lender', etc.

4. Appointment and Scope of Services: Details the appointment of the broker and comprehensively outlines the services to be provided

5. Broker's Obligations: Lists all duties and responsibilities of the broker, including regulatory compliance requirements

6. Client's Obligations: Specifies the client's responsibilities, including providing accurate information and necessary documentation

7. Fees and Payment Terms: Details the fee structure, success fees, payment timing, and any other financial terms

8. Confidentiality: Provisions regarding the handling and protection of confidential information

9. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

10. Representations and Warranties: Standard declarations by both parties regarding their capacity and authority

11. Indemnification: Mutual indemnification provisions protecting parties against specific risks

12. Governing Law and Jurisdiction: Specifies Indian law as governing law and defines jurisdiction for dispute resolution

13. Notices: Specifies how and where official communications between parties should be sent

14. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments

What sections are optional to include in a Commercial Loan Broker Agreement?

1. Exclusivity: Used when the broker is granted exclusive rights to arrange financing for the client

2. Sub-Brokers: Include when the broker may need to engage other intermediaries or sub-brokers

3. Insurance Requirements: Detailed insurance obligations if required by regulatory requirements or client preference

4. Service Level Agreement: Include when specific performance metrics or timelines need to be established

5. Digital Services: Include when the broker provides online platforms or digital tools as part of the service

6. Compliance with Specific Regulations: Additional compliance sections based on specific industry sectors or transaction types

7. Force Majeure: Include when parties want specific provisions for unforeseeable circumstances

8. Alternative Dispute Resolution: Include when parties prefer mediation or arbitration before litigation

What schedules should be included in a Commercial Loan Broker Agreement?

1. Schedule 1 - Service Description: Detailed breakdown of all services to be provided by the broker

2. Schedule 2 - Fee Structure: Detailed fee calculations, including examples and specific success fee scenarios

3. Schedule 3 - Required Documentation: List of documents and information the client must provide

4. Schedule 4 - Compliance Requirements: Specific regulatory requirements and compliance procedures

5. Schedule 5 - Authorized Representatives: List of authorized personnel from both parties who can act under the agreement

6. Appendix A - Standard Operating Procedures: Detailed procedures for loan application processing and communication protocols

7. Appendix B - Report Formats: Templates for various reports and updates the broker must provide to the client

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions


































Clauses




































Relevant Industries

Financial Services

Banking

Commercial Real Estate

Manufacturing

Infrastructure

Information Technology

Healthcare

Retail

Hospitality

Construction

Agriculture

Transportation and Logistics

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Development

Operations

Business Development

Commercial Finance

Executive Leadership

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Commercial Finance Manager

Business Development Manager

Loan Officer

Financial Advisor

Compliance Officer

Legal Counsel

Risk Manager

Corporate Finance Manager

Managing Director

Financial Controller

Chief Executive Officer

Operations Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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